Reagan Revolution Misses Tax Fiefdoms Flourishing in U.S.

By Tim Jones and John McCormick - Oct 28, 2013
Nothing thrives in Illinois like local government -- almost 7,000 units that tax, spend and drive up debt in a state struggling to pay off vendors and cover almost $100 billion of unfunded pension liabilities.

More than any other state, Illinois illustrates how local taxing bodies flourish across the U.S., whether urban or rural, Republican or Democrat. The governments duplicate services and burn tax dollars at the same time states slash money for education and Washington cuts discretionary spending.

In Illinois, which has the 11th highest state and local tax burden in the U.S., overlapping government agencies managing everything from mosquito abatement to fire protection collect billions of dollars, employ tens of thousands and consume resources that could help pay pension deficits and $7.5 billion in outstanding government bills.

“The big focus is on Washington D.C. and deficits and tax increases,” said Dan Cronin, chairman of the DuPage County board in the longtime Republican stronghold west of Chicago. “But people frequently overlook a significant chunk represented by under-the-radar government -- quiet, sleepy, unaccountable.”

Across the country, there are 38,266 special purpose districts, or government units distinct from cities, counties and schools, each with its own ability to raise money. Since President Ronald Reagan declared in his 1981 inaugural address that government “is not the solution to our problem -- government is the problem,” their numbers have jumped 32 percent.